Most Banks are Not Prioritizing Crypto Technology in Near Future: Fed Survey

The Federal Reserve Board of the United States recently surveyed 80 banks on their future financial and investment expectations.

A majority of respondents displayed little interest in investing in distributed ledger technology (DLT) in the near term.

• Just a quarter of surveyed banks called DLT-related investment a “medium” or “high” priority within the next 2 years. Meanwhile, 22% called it “low priority,” while 33% said it was no priority at all.
• On a 2 to 5-year timeframe, the results were more evenly distributed. About one-third called crypto a medium or high priority, while another third maintained that little to no prioritization.
• Nevertheless, most banks do not envision crypto as having a large impact on their liquidity management practices within the next decade.
• Some banks noted that they were actively monitoring developments in the crypto sphere, and would  “adapt to the landscape as needed.”
• The survey specifically targeted 46 domestic banks and 34 foreign banks, all of varying asset sizes and business models. All responses were dated before May 20th.
• All respondents held roughly three-quarters of their reserve balances within the banking system when the survey took place.
• In May, Bank of America CEO Brian T. Moynihan said his bank had no plans to offer crypto services. However, he cited hostility from the Securities and Exchange Commission (SEC) as the primary reason his bank was hesitant to get heavily involved.
• “They’ve said ‘you have to ask us before you do it – and by the way, don’t ask’,” he said at the time.

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Nevertheless, the CEO did not believe his bank was missing out on the “next big thing” because of this circumstance.